Moving Average Cross-over Signals - Trend Indicators Moving Average
Moving average indicator can be used to determine the momentum of a market move - momentum of a trend. In forex analysis there is method of using the moving average indicator just to do this. This method of trading is known as the MA cross over signal. This moving average cross over signal method involves using two moving averages - one moving average that has a higher price period and another moving average that has a lower price period. For example a moving average indicator crossover system can have the 5 day moving average and the 7 day moving average.
These two moving averages will then be used to determine the direction of the market and also the momentum of the market trend.
Upward Forex Trend - when both moving averages are heading upwards the trend is upwards - upward trend direction
Downward Forex Trend - when both moving averages are moving down the trend is downwards - downwards trend direction
The two moving averages also will be used to determine the momentum of the current market trend direction. As long as the two moving averages keep moving in the same direction then the current trend direction is likely to continue.
If the two moving averages crossover each other - then it means that the market trend may change and a trader should get ready to open or to close a trade depending on the direction of the market that the trader is trading.
A trader can learn more about how to use this moving average cross over signal and get an example of how this Moving Average crossover signal system is used to generate trade signals in the strategy tutorial: Moving Average Cross-over Signal Trading Method
Beginner traders can also add this strategy method in their system & combine this moving average cross over method with other indicators to come up with a trading system. A trader will then write the rules of their system & use these written forex rules to know when to open a buy trade or a sell trade & when to close the trade. To learn how to come up with a system - traders should go to strategies section of this website and read the systems guides.
Trend Indicators Moving Average Indicator Analysis - Trend Indicator MetaTrader 4 Moving Average Indicator
